Fake checks are used in many types of scams and the best way to protect yourself is to stay vigilant.
In a fake check scam, a person you don’t know asks you to deposit a check and then send a portion of those funds back to that same person or on to a third party. The scammers provide reasons to convince you as to why this must be done. Reasons such as funds are needed to cover mover’s fees, supplies, or taxes owed, or simply an ‘error’ was made that they need your assistance in rectifying. All of these are bogus excuses made up to convince you to send them money.
They will most often ask you to use a different payment method such as gift cards, wire transfers, or more commonly, through a device enabled payment application. Victims of this scam often realize what has happened once the bank notifies them that the check has been returned as a fictitious item.
The most common check scams include:
By law, financial institutions have to make part of the funds from check deposits available quickly, usually within two days. Though it may appear that this check has been ‘cleared’, the check must still be presented for payment to the financial institution the check is drawn on.
There may be a number of reasons that a check is returned unpaid to the bank of deposit, including that the check was determined to be fake. If a check is returned for any reason, the financial institution makes the adjustment from the account it was deposited to.
Therefore, don’t rely on the proceeds from a check unless you can verify the person or entity you received the check from. Always err on the side of caution if you receive a check from a person or company you do not know and contact your financial institution for assistance if you are unsure of the legitimacy of the check.
Fake checks can be difficult to identify because they assume the appearance of a legitimate check. They are often printed with the names, addresses, and phone numbers of real companies or financial institutions. They can be personal checks or Cashier’s Checks.
Fraudsters use contact information and details for real companies to make the fake appear legitimate. Often legitimate companies are not even aware that their information has been used as part of a scam. Therefore, it is recommended you verify the person or entity listed on the check especially if you are being asked to send funds back.